Comment: Aviation policy remains grounded

Comment: Aviation policy remains grounded

Industry leaders at the Abta Travel Matters conference last Thursday listened politely to transport secretary Justine Greening as she outlined the anticipated timetable for publishing an aviation strategy framework document, but not a lot else.

The underlying frustration in the industry, and more widely across business, was evident two days later at the Guild of Travel Management Companies’ (GTMC) conference in Dubai.

Peter Drummond of Horncastle Executive Travel, who chairs the GTMC air working party, summed up the feelings of many when he said: “The government does not have an aviation strategy. It’s not even on the agenda. There is no long-term planning.”

Drummond was not quite right in one respect. Aviation is on the government’s agenda. But it certainly does not have a policy.

The reason is the current government tore up the policy it inherited – for expansion at Heathrow – and binned the previous government’s Future of Air Transport White Paper which set out a long-term strategy.

Now it wants the industry’s help in drafting a preliminary replacement paper (a ‘framework’ document) from a reduced number of options.

The 2003 White Paper made assumptions about future demand and growth that are genuinely open to question. But the lack of capacity at Heathrow is blindingly obvious daily. The reasons the coalition junked the paper and previous policy were purely political.

The Conservatives embraced opposition to a third runway at Heathrow ahead of the last election to channel support among voters under the Heathrow flight path in constituencies like Putney (represented by Conservative MP Justine Greening).

The policy shift also signalled a Tory move to the centre ground, away from knee-jerk support for business and towards concern for the environment – an issue that might more naturally be seen as ‘belonging’ to the left.

The Liberal Democrats had long since been part of the anti-third runway camp. The coalition agreement between the parties enshrined a block on expansion in official policy, where it is to remain until the next election.

So the GTMC was mightily entertained by Qatar Airways chief executive Akbar al Baker exhorting the UK to “act like us” and just get on with building a new airport.

The realities on the ground in Qatar and the UK are very different, of course. Doha has plenty of empty space for the new Doha International Airport now under construction next to the old. Bucks, Berks and Kent do not. The UK does not have Qatar and neighbour Abu Dhabi’s “box of money” either, as al Baker acknowledged – quite the reverse.

The cost of a Thames estuary airport is put at £50 billion, yet would almost certainly cost more – such projects always do – and this is just the bill for the airport, not the motorway(s) and express rail links required to take 100 million passengers a year to and from it.

Against a background of steepening government austerity (the biggest cuts are to come), it’s hard to see a significant proportion of such a bill being placed on the government’s books. Yet without state guarantees, why would major investors step in?

The UK does not have Qatar’s political system either. Whenever and wherever a new airport or runway is sited will attract opposition. There is no way around that.

So the industry must deal with political reality.

The mood in the sector does appear to be shifting, from Heathrow towards a new airport, perhaps as a result of Mayor Boris. However, there are at least four key problems with this.

One is the cost. Another is the likely level of opposition, not just around the site of the new airport and from those opposed to airport expansion in general, but from those around Heathrow whose jobs, livelihoods and businesses would disappear. Of course, there will be opposition to any proposal, but a new airport is likely to attract the most.

A third is the time a new airport will take to get into construction, a process which might be expected to reflect the degree of opposition. Boris Johnson’s aviation policy advisor, Councillor Daniel Moylan of Transport for London, rather dismissed this at the Travel Matters conference, arguing it was “a matter of leadership” and political will.

That is right up to a point. However, the project’s opponents might display equally strong will. A combination of legal challenges, electoral challenges, demonstrations, occupations and God-knows what else could produce quite a battle.

A fourth problem is British Airways (no offence) and its understandable opposition to moving from Heathrow. Willie Walsh has made clear he won’t entertain the idea. Boris Island is a non-starter as far as he is concerned, and if the UK’s hub carrier refuses to move to a new hub, how is it going to happen?

Indeed, short of Qatar or Abu Dhabi investors buying up a site, building the airport, compensating all and sundry and moving carriers in, it is difficult to see a new airport winning investment without BA involvement.

Moylan suggested “Willie won’t be there for ever”. But neither will Boris – although he may be prime minister at some point before we see the back of him and Willie won’t be that.

Councillor Moylan’s vision of Heathrow is as a “premium leisure” point-to-point airport for “the comfortably off”. “Heathrow would not have to close,” he believes, “it would be a different airport.”

Moylan is an engaging speaker. But I was more drawn to the view of Tim Leunig, chief economist of liberal think tank CentreForum, who also appeared at Travel Matters.

He dismissed Moylan’s argument as “rubbish”. “Heathrow will survive because it is where people want to fly from,” said Leunig. “Boris Island will struggle to get off the ground.”

With politics, like all human actions, come cock-ups and unintended consequences which complicate the picture.

Among the most interesting asides at the GTMC conference was one from Tim Montgomerie, founder and editor of the influential Conservative blog ConHome, a man with connections to the heart of the Tory party.

He suggested David Cameron had welcomed Treasury secretary Chloe Smith to her new post with the words: “It’s good to have an economist at the Treasury.” Smith, who took over responsibility for APD among much else, replied: “I’m not an economist.”

Montgomerie added:  “I’m not sure Cameron was aware of Justine Greening’s history of opposition to a third runway at Heathrow when he appointed her transport secretary.”

So that is where we are.


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